Speculation: Amnesty buyouts as trade currency?

[Ricky Bobby]

They were willing to absorb Lombardi to get Franson. But, that kind of situation is pretty rare, don't see it happening again.

We might not get as good of an asset as Franson but I see no reason.

We also payed Kolzig to gain a 4th round pick.

Back in 06, San Jose got a 1st rounder for taking on the Malakhov contract.

I'd be looking at JovoCop, Upshall and Umberger all as potential trade buyout candidates considering how bad their contracts are and the salary restraints (in real dollars) on those teams.

 

[headwire]

What I was getting at was the way the money is utilized where you only address the acquisition potential.

Hypothetically say the Leafs take on a $6 mil player as a amnesty buyout and get a younger player in addition that can play say making $1.5 mil.

The buyout is 2/3rds of $6 mil, so that is $4 mil actual payout to get rid of him.. Essentially that makes the young player making $5.5 mil in actuality when you add his contract + the buyout amount. While an amnesty would avoid the cap consequences, but not the wasted money aspect.

So couldn't a team like the Leafs rather spend that actual $5.5 mil (opportunity cost and actual MLSE $$) proactively on a much better player, like say offering it to David Clarkson as a UFA this summer?

If I was an owner and my GM was picking between picking up other teams mistakes to spend my money getting rid of them, or actively pursuing top end talent and investing my money on that player I know which option I would chose.

Fair enough, but if you have the opportunity to also add assets by spending money that won't count against your cap, I'd say you do that as well, with the blessing of MLSE of course. I'd hate to be the GM that sits down in front of Anselmi and says "by the way, we're spending 6 million, and we got a 2nd round pick out of it.

I guess what I'm trying to say is that, if an amnesty buyout has some value, and if the return is attractive, and if the team owners are willing to part with real money to improve the team's assets, then you'd do it.

 

[Ciao]

Why not spend money on players that will actually help your team, as that would be money better spent, NO?.

Not sure if its even possibly under the rules of the CBA to trade amnesty buyout players as the Cap exemption was put in place for Cap strapped teams to make adjustments for the lower cap next year and not for poor\budget teams to dump salary.

Besides it looks like Komisarek is earmarked for one of Leafs buyouts one of their own mistakes. So at best its one potential opportunity here. But to me its not a move a team that is trying to win does as it wreaks of desperation really. IMO

You're confusing saving money with preserving cap room.

The Franson trade worked because Nashville was interested in saving money on the Lombardi contract which the Leafs were happy to pay if it brought them Franson. Good deal money-wise for Nashville and talent-wise for Toronto.

Why not do the same thing with amnesties if the Leafs could acquire talent from a team wanting to save money? If the Leafs can acquire talent by taking on a bad contract they can buy out without affecting their cap, they can then go out and continue to spend money under the cap on players they want to keep.

The Leafs make so much more money than most other teams that they could probably find a ready trading partner, and should do this if it helps the team.

If you don't like this idea would you unwind the Franson deal if you had the chance? Same principle - dollars for talent.

 

[Mikeyg]

I dont think JML is going to get bought out anymore tbh, i think komi is obvious, and grabro would be if they could acquire another center somehow

 

[Mess]

Fair enough, but if you have the opportunity to also add assets by spending money that won't count against your cap, I'd say you do that as well, with the blessing of MLSE of course. I'd hate to be the GM that sits down in front of Anselmi and says "by the way, we're spending 6 million, and we got a 2nd round pick out of it.

I guess what I'm trying to say is that, if an amnesty buyout has some value, and if the return is attractive, and if the team owners are willing to part with real money to improve the team's assets, then you'd do it.

As you just confirmed yourself, the return to offset the buyout would have to be an exceptional return as even a 2nd round pick (a good asset) would not be of interest to any owner to buyout a $6 mil bad player contract to obtain it. So how likely is your suggestion to be potentially used if it must be greater than high draft picks return?

I believe with the new CBA rules of retaining salary in trade that it would be money better spent to say pick up $2 mil of say Grabovski's contract in trade for a couple of years to land a bigger contract another team might want to move for financial reasons, as opposed to wasting that $4 mil on a buyout to utilize the amnesty buyout special exception clause.

More than one way to skin a cat and so there are more means than one available to take advantage of a big market financial muscle to improve a team.

If MLSE does agree to waste money getting rid of Komisarek already through amnesty buyout, then they also will likely have less of an appetite to support a GM to waste even more $$ on other teams mistakes, simply because they can afford to. Making good business sense also has to factor into the equation as well for Ownership.

Giving their GM an opportunity to get rid of a internal mistake that he didn't make in hopes of better spending their cap dollars is one thing for team improvement, but allowing him to knowingly and willingly pursue other contract mistakes to simply pay them to go away is another. IMO

 

[JackJ]

MLSE will be on the hook for Komisarek + Tucker (1mil) + Armstrong (1mil).. Doubt they want to add a fourth mistake.

 

[Parkdale]

Absolutely, the Leafs should investigate getting value from their 2 Compliance buyouts. They have only one internal candidate (Komi) and you have to believe Nonis will look around to use the other one effectively. It will be interesting to see how each team in the league use their 2 free passes.

 

[Man Bear Pig]

MLSE will be on the hook for Komisarek + Tucker (1mil) + Armstrong (1mil).. Doubt they want to add a fourth mistake.

MLSE probably makes that $2 million from one intermissions worth of beer sales alone

 

[headwire]

As you just confirmed yourself, the return to offset the buyout would have to be an exceptional return as even a 2nd round pick (a good asset) would not be of interest to any owner to buyout a $6 mil bad player contract to obtain it. So how likely is your suggestion to be potentially used if it must be greater than high draft picks return?

I believe with the new CBA rules of retaining salary in trade that it would be money better spent to say pick up $2 mil of say Grabovski's contract in trade for a couple of years to land a bigger contract another team might want to move for financial reasons, as opposed to wasting that $4 mil on a buyout to utilize the amnesty buyout special exception clause.

More than one way to skin a cat and so there are more means than one available to take advantage of a big market financial muscle to improve a team.

If MLSE does agree to waste money getting rid of Komisarek already through amnesty buyout, then they also will likely have less of an appetite to support a GM to waste even more $$ on other teams mistakes, simply because they can afford to. Making good business sense also has to factor into the equation as well for Ownership.

Giving their GM an opportunity to get rid of a internal mistake that he didn't make in hopes of better spending their cap dollars is one thing for team improvement, but allowing him to knowingly and willingly pursue other contract mistakes to simply pay them to go away is another. IMO

So, I suppose in summary, it is unlikely that the potential value of an amnesty buyout as trade currency is high enough to warrant the financial expense on so little return. To put it differently, the return would not be great enough to warrant the financial expense of buying out someone else's mistake.

We also have to consider that there are probably not that many teams with more than 2 mistakes, further de-valuing any leftover amnesty buyouts.

Edit: Double negative.

 

[SpeakerForTheDead]

MLSE probably makes that $2 million from one intermissions worth of beer sales alone

That is one playoff home game profit I believe.

 

[headwire]

MLSE probably makes that $2 million from one intermissions worth of beer sales alone

That's like 8-10 beers per person, per intermission.

I'm surprised there's not more fights in the stands at Leafs games.

 

[egd27]

Absolutely, the Leafs should investigate getting value from their 2 Compliance buyouts. They have only one internal candidate (Komi) and you have to believe Nonis will look around to use the other one effectively. It will be interesting to see how each team in the league use their 2 free passes.

You could even make the argument that you don't "waste" an amnesty buyout on Komi, and just do a "normal" buyout. With only one year left on his deal, it would amount to a $2M hit in 2013 and $1M in 2014.

The Leafs may decide they could afford that and use the amnesty buyouts on contracts will longer cap implications, or take on another team's "mistakes" for assets, as discussed.

 

[Keeping it Blue]

They've already done this with Kolzig and Lombardi to a lesser extent.

One thing that Burke has always said is that he was permitted to use the finical might of the team if it could get them ahead. Front office staff, Kolzig deals, etc.


I have no idea where Mess' ideas are coming from. The cost of a young player on $1.5 contract is not the additional $4 from a buyout. The $4 is a sunk cost that is effectively included with the trade. Would you do a trade for a good young player for $4, 6, even $10 million that does not effect the salary cap? I know I would. It's not like the Leafs operate under an internal cap unlike some teams.

Nothing that has been said so far by the new owners or Nonis has suggested that the Leafs are going to try to save money now. This has absolutely nothing to do the Leafs choosing between a UFA and taking someone else's buyout.


The only way this can be a possibility is if they have no plans to buy out Grabo or Liles. It's unlikely they'd do this in this season though, they'll save it for next year. Then he'll have to prove to the board that the money they are spending on a sunk cost has a good chance to improve the hockey team and make them more money. It's no different than renovating something that's designed to generate more income. The player is designed to generate more income by increasing jersey sales, improving playoff results or helping with the public image of the team. Are either of those guarantees. Nope. But's that's why business is a risky thing.

Also, for all we know, Nonis could have some kind of "slush" fund in his budget for exactly this thing.


I could be wrong on all of this and missed the news about the Leafs cutting costs and saving money. If so, I'd like to read the report, it would be interesting.

Also, I don't buy any reference to them not spending to the cap equaling proof of a budgetary constraint. Correlation does not imply causation.

 

[ACC1224]

That is one playoff home game profit I believe.

I would think it would be more than that now. They use to throw that number around 10 years ago.

 

[Mess]

So, I suppose in summary, it is unlikely that the potential value of an amnesty buyout as trade currency is high enough to warrant the financial expense on so little return. To put it differently, the return would not be great enough to warrant the financial expense of buying out someone else's mistake.

We also have to consider that there are probably not that many teams with more than 2 mistakes, further de-valuing any leftover amnesty buyouts.

Edit: Double negative.

Nice summary.

While it may have been (CBA permitting) a potential opportunity, its not likely to be utilized for the reasons discussed.

 

[headwire]

Nice summary.

While it may have been (CBA permitting) a potential opportunity, its not likely to be utilized for the reasons discussed.

Thanks for your input.

 

[thinkinfeller]

Are we sure that Komi can't be traded? He has 1 year left at a 4.5 mil cap hit, but a real salary of 3.5 mil. He is a serviceable defenceman and could be useful to a team looking to make the cap floor.

 

[Ciao]

Player costs for the Leafs are a drop in the bucket.

Many other teams would be hesitant to throw money away on a compliance buyout because they are necessarily concerned about the bottom line.

The Leafs are in the exact opposite position. If they could acquire talent, improve their team's on-ice performance, extend a playoff run or just generally generate more interest in the team it would be well worth their while to do so. The Leafs can't go wrong by spending every dollar they're allowed to spend on improving the on-ice product. In the end, it all comes back to them in spades.

I don't buy the spacey arguments that this amount of dollars is not worth that hockey asset. Maybe for Columbus. Not for the Leafs. If it weren't for the cap they would easily spend much more, and still make untold profits.

 

[Keeping it Blue]

Player costs for the Leafs are a drop in the bucket.

Many other teams would be hesitant to throw money away on a compliance buyout because they are necessarily concerned about the bottom line.

The Leafs are in the exact opposite position. If they could acquire talent, improve their team's on-ice performance, extend a playoff run or just generally generate more interest in the team it would be well worth their while to do so. The Leafs can't go wrong by spending every dollar they're allowed to spend on improving the on-ice product. In the end, it all comes back to them in spades.

I don't buy the spacey arguments that this amount of dollars is not worth that hockey asset. Maybe for Columbus. Not for the Leafs. If it weren't for the cap they would easily spend much more, and still make untold profits.

Exactly.

I do not believe I've seen evidence provided to suggest that it is not likely. I've provided a number of counters to the reasons and I am honestly interested in getting anyone's opinion who doesn't think it is likely.


1. What leads you to believe that MSLE is not allowing Nonis to use their financial might anymore?

2. They've done it before, why the change of heart now? Is this because you believe that Rogers/Bell are interested in cutting costs? Where is the evidence to suggest this?

3. There will be a number of team that will need to count buyout numbers against their internal cap. Toronto will not need to do this. Do you agree or disagree with these statements?

 

[Parkdale]

You could even make the argument that you don't "waste" an amnesty buyout on Komi, and just do a "normal" buyout. With only one year left on his deal, it would amount to a $2M hit in 2013 and $1M in 2014.

The Leafs may decide they could afford that and use the amnesty buyouts on contracts will longer cap implications, or take on another team's "mistakes" for assets, as discussed.

Good point! Another thing to consider.

 

[ThreeHundred]

How does the amnesty buyouts work.. if we were to amnesty anyone on our roster, are they placed on waivers first?

 

[SpeakerForTheDead]

I would think it would be more than that now. They use to throw that number around 10 years ago.

That's true. I was just going by the numbers from our last playoff appearance...I guess its been long enough to change that.

 

[-DeMo-]

How does the amnesty buyouts work.. if we were to amnesty anyone on our roster, are they placed on waivers first?

yes to buyout a player you must first put him on waivers.

 

[Canada4Gold]

Are we sure that Komi can't be traded? He has 1 year left at a 4.5 mil cap hit, but a real salary of 3.5 mil. He is a serviceable defenceman and could be useful to a team looking to make the cap floor.

unless we were to eat some of his salary or take back a bad salary in return then no he won't be traded.

He was on waivers a couple weeks ago and nobody want him for free so I don't see why anyone would trade assets for the same thing.

 

[leburn98]

They've used their financial might in the past. The Lombardi/Franson deal was the prime example. We also did it in the Lupul/Gardiner for Beauchemin deal. Lupul was considered a salary dump at the time.

Considering the returns we received for these two deals, I say MLSE would do an amnesty buyout under similar circumstances.